World Bank’s long-term outlook for developing economies
As 2025 marks the close of the first quarter of the 21st century, the World Bank’s Global Economic Prospects Report takes stock of the performance of developing economies over the past 25 years and evaluates their future outlook. Developing economies have grown significantly, now accounting for nearly 45 per cent of global GDP (up from just 26 per cent in 2000) and driving 60 per cent of global growth. However, their long-term outlook for developing economies is now the weakest it’s been since the start of the century, with the situation particularly severe for the world’s 26 poorest nations. For more insights, CNBC Africa is joined by Phil Kenworthy, Senior Economist at the World Bank’s Prospects Group.
Fri, 17 Jan 2025 15:47:16 GMT
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AI Generated Summary
- The performance of developing economies over the past 25 years has been significant, with a notable rise in their share of global GDP and contribution to global growth. However, the long-term growth outlook for these economies is currently at its weakest point since 2000.
- Factors such as slowing investment growth, declining productivity, and increased global trade restrictions are identified as key obstacles to the future growth of developing economies.
- The report suggests potential strategies for developing economies to navigate the challenges, including regional trade integration, reducing trade costs, and implementing smart industrial policies to drive growth despite the less friendly external environment.
The World Bank's Global Economic Prospects Report reflects on the progress of developing economies over the past 25 years and their future outlook as the world closes the first quarter of the 21st century. Developing economies have significantly expanded, contributing nearly 45 per cent of global GDP, a substantial increase from the 26 per cent share in 2000, and driving 60 per cent of global growth. However, the long-term outlook for these economies is now facing its weakest point since the turn of the century, especially impacting the world's 26 poorest nations. Phil Kenworthy, Senior Economist at the World Bank's Prospects Group, highlighted key factors responsible for this decline in growth potential in a recent interview on CNBC Africa. The report assesses the impact of slowing investment growth, declining productivity, and the rise in global trade restrictions on developing economies. It also suggests strategies for overcoming these challenges and fostering growth despite the less favorable external trading environment. With a spotlight on Africa, the report indicates some positive growth projections, particularly for countries like South Africa and Nigeria, but also highlights the need for structural improvements to drive sustainable development and poverty reduction. Countries like Rwanda and Uganda are cited as success stories due to their market-oriented policies and prudent fiscal management, while conflict-ridden nations continue to face significant economic setbacks.
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